TaxTMI 
TaxTMI 
2023 (10) TMI 184
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....f search in case of Sharad Doshi group on 28.02.2014 as these documentary evidence clearly show that the assessee has taken accommodation entries in the form of unsecured loan from companies controlled by Sharad Darak, a known entry provider and invested in the firm M/s Amrit Reality and M/s MSD developers of Doshi group." 3. "Whether on the fact and in the circumstances of the case and in law, the Ld. CIT(A) has erred in completely ignoring the statement of assessee's own father Shri Sanjay Shukla and statement of Sharak Darak, a known entry provider as well as ignored the documentary evidence seized and found during the course of search action. Further, Ld. CIT(A) ignored the fact that father of Shri Aakash Shukla in his statement, submitted that Aakash Shukla is a student and he(Sanjay Shukla) has knowledge about investment mode in the name of Akash Shukla." 4. "Whether on the fact and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the assessee has discharged it onus of cash credit u/s 68 of IT Act especially when it was on record that accommodation entries were received from the companies controlled by Sharad Darak, a....
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....t these loan creditors are nothing but paper companies providing accommodation entries. The AO accordingly made the addition of Rs. 4,50,00,000/- as unexplained credit. The AO has relied upon judgment of Hon'ble Supreme Court in case of Pr. CIT vs. NRA Iron & Steel Pvt. Ltd. 412 ITR 161(SC). He has relied upon the order of the Assessing Officer. 3. On the other hand, Ld. AR of the assessee has submitted that the AO has made the addition only on suspicion without being having any material on record to show that loan transactions are bogus or not genuine. The assessee produced all relevant details and record including confirmation of loans, bank statements, copies of ITR, copies of audit Report and copies of the assessment orders of the loan creditor companies. All these records were not considered by the AO, therefore, this was again submitted before the Ld. CIT(A). Though the AO objected the filing of the record before the Ld. CIT(A) however, the Ld. CIT(A) after verification of the assessment record found that this is not an additional evidence but was also filed before the AO. Ld. AR has referred to the chronological dates and events and submitted that M/s. Jayant Securities a....
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....above and found that the Ld. AO has concluded that the above unsecured loans had been received from the Companies controlled by Shri Sharad Darak who is a well known accommodation entry provider of Indore. The Ld. AO on the basis of findings of past actions of the various officers held that Shri Sharad Darak runs dummy companies through which he provides entries to needy persons. The Ld. AO has also relied upon statement of Shri Sanjay Shukla, father of the appellant, statement of Shri Sharad Darak, director of M/s Jayant Securities and Finance and M/s Jay Jyoti India Pvt Ltd. On perusal of assessment order, it has been found that the Ld. AO has not made any independent enquiry to disprove the identity, creditworthiness, genuineness of transaction. The Ld. AO has also not enquired into the nature and source of unsecured loans. The Ld. AO has only given emphasis on some enquiries conducted in the past and given a general findings and made additions. No specific finding about the companies proving the transactions done in the year under consideration bogus, has been given in the assessment order. The Ld. AO has also relied upon the statement u/s. 131(1A) dated 14.03.2014 of Shri Sanj....
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....The ld. A.O should have acted on the details furnished by the appellant, but he did not do so. Hon'ble Delhi High Court in the case of Oasis Hospitalities P. Ltd. reported in 333 ITR 119(2011) has held as under: "11. It is clear from the above that the initial burden is upon the assessee to explain the nature and source of the share application money received by the assessee. In order to discharge this burden, the assessee is required to prove: (a) Identity of shareholder: (b) Genuineness of transaction; and (c) Creditworthiness of shareholders. 12. In case the investor/shareholder is an individual, some documents will have to be filed or the said shareholder will have to be produced before the AO to prove his identity. If the creditor/subscriber is a company, then the details in the form of registered address or PAN identity, etc. can be furnished. 13. Genuineness of the transaction is to be demonstrated by showing that the assessee had, in fact, received money from the said shareholder and it came from the coffers from that very shareholder. The Division Bench held that when the money is received by cheque and is transmitt....
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....iates the transaction set up by the assessee nor should the AO take such repudiation at face value and construe it, without more, against the assessee; (7) the AO is duty bound to investigate the creditworthiness of the creditor/ subscriber, the genuineness of the transaction and the veracity of the repudiation. (ii). CIT v. Kamdhenu Steel & Alloys Limited and Other (2014) 361 ITR 220 (Delhi) wherein it is held that: "38 Even in that instant case, it is projected by the Revenue that the Directorate of Income Tax (Investigation) had purportedly found such a racket of floating bogus companies with sole purpose of lending entries. But, it is unfortunate that all this exercise if going in vain as few more steps which should have been taken by the Revenue in order to find out causal connection between the case deposited in the bank accounts of the applicant banks and the assessee were not taken. It is necessary to link the assessee with the source when that link is missing, it is difficult to fasten the assessee with such a liability (iii). The decision of Hon'ble Apex Court in the case of NRA Iron & Steel Pvt. Ltd. (Arising out of SLP (Civil) No.....
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....mpanies In another decision in the case of M/s. Radhishwari Developers Pvt. Ltd. (ITA No. 493/Ind/2018 dated 20.07.2021) Hon'ble ITAT Indore has held that M/s. Jayant Securities and Finance Ltd. is regularly assessed to tax for last many years and scrutiny proceedings u/s. 143(3) of the Act were completed in this company. This company is regularly filing appeal before the judicial forums which show that this company is not a dummy company. Considering the above findings of the Hon'ble ITAT, above companies cannot be declared as dummy company. I find that the said companies are regularly assessed with tax and they also filing appeals at different forums. Thus, identity, creditworthiness, genuineness of transactions can not be doubted here. The appellant has also brought on record following decisions wherein Ms Jayant Securities and Finance Ltd. has been treated as a genuine entity Sr. No. Judicial Pronouncements Tribunal Citation 1 Radhishwari Developers P. Ltd. ITAT Indore ITA No. 493/Ind/2018 2 M/s. Admamum Finance Ltd. ITAT Indore ITA No. 331/Ind/2018 3 Tirupen Construction ITAT Indore ITA No. 522/Ind/2014 4 KK Patel F....
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....lowed. 7. We further note that this tribunal in the case of the father of the assessee Shri Sanjay Shukla vs. ACIT (Supra) has considered the identical issue of unsecured loans as under: 12.3 We have heard rival contentions, perused the records placed before us. Through ground No.1 revenue has challenged the finding of Ld. CIT(A) deleting the addition of Rs. 3,86,23,218/- made for unexplained unsecured loan and interest paid thereon taken from following parties: S. No. Name of Party Loan Received during the year Interest paid on the loan amount 1 Jayant Securities and Finance Ltd. Vadodara Rs. 1,25,00,000 Rs. 8,79,041/- 2 Jay Jyoti India Pvt. Ltd. Mumbai Rs. 1,25,00,000 Rs. 8,69,794/- 3 Manas Realtors Pvt. Ltd. New Delhi Rs. 50,00,000 Rs. 3,41,507/- 4 Shri Sushil Kumar Ratan Lal Khowal, Akola Rs. 50,00,000 Rs. 3,32,876/- 5 Chandumal Govindram, Indore Rs. 12,00,000 ---- Total Rs. 3,62,00,000 Rs. 24,23,218/- 12.4 We find that Ld. CIT(A) has dealt with this issue elaborately taking note of all the relevant documents filed by the assessee and the settled judicial precedence on the issu....
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.... had financial capacity of advancing 133 times more than the loan given to the assessee company. Thus, Ld. CIT(A) has rightly appreciated these facts for deleting addition for made u/s 68 of the Act as well as the interest disallowance. 12.7. As regards unsecured loan of Rs. 50 lakhs taken from Manas Realtors Pvt. Ltd. and Rs. 50 lakhs Shri Sushil Kumar Ratanlal Khowal from perusal of the documentary evidences filed by the assessee, we notice that Manas Realtors Pvt. Ltd. is stated to be a Real Estate Consultant Company and genuine loan has been advanced to the assessee company. Similarly Shri Sushil Kumar Ratanlal Khowal is also regularly assessed to tax and has declared income of Rs. 6.49 crores for the year under appeal which in itself is sufficient to explain the source of loan of Rs.50 lakhs given to assessee. Even the case of Shri Sushil Kumar Ratanlal Khowal has reached before the Coordinate Bench Nagpur in ITANo. 463/NAG/2013 dated 25.03.2019 wherein appeal of the revenue was dismissed. We therefore, find no infirmity in the finding of Ld. CIT(A) deleting addition made for loan taken from Manas Realtors Pvt. Ltd at Rs.50 lakhs and shri Sushil Kumar Ratanlal Khowal ....